Thursday, March 30, 2006

Stocks Hold Yesterday's Gains

Most stocks I follow did a pretty good job of holding on to yesterday's gains. The COMP finished higher today, while the SPX was off slightly. Breadth was solid, not so much in the A/D line, but the Hi/Lo index hit a 2-week high on the NYSE and a 4-week high on the Nazz.

There were also some surprising numbers on the sentiment front. The ISE Sentiment Index fell to 114 today. That is an extremely low level, and one that is far more indicative of pessimism than rampant bullishness. Also, the bull/bear spread on the AAII fell this week. It is basically the exact opposite of what I would have expected if you told me the Nasdaq was breaking out to new highs.

This leads me to believe that any near-term weakness will likely by mild. Tomorrow is quarter end, so there will likely be a bid underneath the market. Next week we will see if the bulls can continue to hold court.


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